It Figures Podcast S7:E1 – Introducing: Capital Markets

Speaker 1:

From Carr, Riggs & Ingram, this is It Figures, the CRI podcast, an accounting advisory and industry focused podcast for business and organization leaders, entrepreneurs, and anyone who is looking to go beyond the status quo.

Brent Leslie:

Hello, I’m Brent Leslie and I’m the leader of the Capital Markets group at Carr, Riggs & Ingram. And we’re here today just to talk a little bit about what that is and the types of services that we’re going to be working on and the types of clients we’re going to be working with and some of the things, new solutions that we’ll be able to offer now as a firm. So with that, I’m going to introduce one of my partners, Michael Corkery, and then we’ll just have a little dialogue about the things that we’re going to be doing.

Michael Corkery:

Hi, I am Mike Corkery. I am a partner in the Capital Markets group at CRI. We’re thrilled to be with the firm. We’ve worked with public companies for over 25 years, particularly in the small and mid-cap space. And we’re looking to expand the services that CRI provides for this market space and kind of fill a need that’s being ignored by a lot of larger firms.

Brent Leslie:

So I think the genesis of this group is really, most of the people that work in this group started their careers at one of probably 10 firms that everybody’s heard the names of before and has traditionally serviced a lot of these kinds of companies. And I think through the years of working at those firms and learning and those kinds of things, it became really apparent that somewhere in the last 5 to 10 years, the service that was being provided to the smaller cap public companies and the more middle market companies looking for private equity money and things like that just declined exponentially. It really got to a point where it became very hard to service those kind of companies when we were at those firms. And so we started looking around and I myself looked around and was kind of thinking, “Hey, there’s got to be a better way to do this, a better partner to do this with and a better approach here.”

And so when that happened, I decided it was time to leave that large national firm and try to find a partner that was more in line with what we were trying to do, that actually wanted to work on smaller cap public companies and middle market of the world. With that, I found a firm that I went to for a while and that firm ultimately ended up becoming part of CRI recently, but I spent the last six years building a capital markets team that is highly focused on working specifically on these kinds of companies. Companies that oftentimes have equity issues or other types of issues that smaller companies have that don’t necessarily have all the resources they need to be a large accelerated big file or touch of company. Because of that, like I said, a lot of the other firms out there have kind of turned their back on them or just dropped the ball and not treated them as their A clients.

We’ve always kind of taken the approach that those are the clients we want to work with, the ones that are looking for help and that the need some guidance and assistance. And so we help in a variety of ways. We can do anything from the advisory work and helping with complex accounting issues and implementing new standards and helping assisting in writing their documents for them and their uplift and all of those kinds of things from an advisory standpoint. And we can also help from a compliance standpoint, obviously not on the same clients, but we can also be the auditors of record and work with tax compliance and audit compliance and any of those kind of needs too. So with that, those are really the kind of things that we’re targeting and kind of services we do. And I’ll let Mike talk a little bit about his background and some of the things he’s done along the way too.

Michael Corkery:

Like Brent said, I spent the first close to 10 years in one of those top 10 firms in the big four where you see a client once a year for the audit and then you’d see them in the next year. I spent the next basically 15 years at a mid-sized firm trying to provide white glove service to clients that weren’t getting it from larger firms. I joined Brent about four months ago with his vision of bringing the services that the billion-dollar companies get to the small cap space. They need more attention, they need more white glove service, they need more response at this just because quite frankly, they don’t have a robust accounting department that has seen some of the funky transactions that they end up getting involved with with the complex financial instruments. So we pretty much made it our mission to provide those services to what someone called the micro cap space and help them, whether it’s going from a company that’s looking to IPO, a company that’s already public, and just bringing the deep expertise that our team has to the table for them.

Brent Leslie:

Talk a little bit too about a couple of new things for Carr Riggs that come along with this group as we now have a presence in the New York market. Mike and several people on our team sit in that market, and so that’s going to be a new thing for us and we’re excited to start building and growing that out in addition to this group. But I think that, Mike, you want to talk a little bit about, I think, we’re going to be getting some office space there in the next coming days and looking to build out a practice there too.

Michael Corkery:

Yeah, so we’re excited to get the CRI brand out there. We’ll be taking office space in Melville New York, that’s on Long Island, but obviously spending a significant amount of time in the city with clients and referral sources and just really trying to get the brand out to let everybody know that CRI is in the capital market space and we are looking to service these clients and kind of bring together a whole boutique thing of services that CRI already had some in place and now it’s kind of just bridging the gap. So let clients know that we could run the gamut on services, whether it’s exit activities or capital raise.

Brent Leslie:

I think that’s a really good point, Mike, and something that’s probably worth talking about. And when we were looking at which firm to join up with, we felt that CRI was the perfect partner for this because I think that we have a lot of similarities. I think we have a lot of similar types of places in the market, and I think the biggest thing is being able to package what we do now with a COP25 firm in the country and the resources and girth that that gives us, it’s just going to be phenomenal for the practice and for what we’re going to be able to do for our clients now going forward.

We already have a great platform of all of the support services that we needed to be able to be successful in this endeavor. And we have great tax support, we have great valuation support and great IT support and all of the things that we needed here to really be able to provide that top-notch white glove service to these kind of companies. So I think it’s the perfect partnership and we’re really just excited about what the coming months and years are going to bring. I think that we’re well on our way to becoming the premier firm in working in this space and really, like I said, focusing on the robust, in-depth technical expertise combined with that white glove service that kind of disappeared from the market in the past, like I said, 5 to 10 years.

So we’re really, really excited about that and as we move forward with this, there’s going to be lots of other new opportunities that come along with it, with other groups that are currently in the firm that we’re currently working with. Mike, why don’t you talk a little bit about the types of companies that would need our services or when it’d be the right time when you’re looking for accountant to bring in our group?

Michael Corkery:

It depends on your situation, right? They’re looking to IPO. There’s probably an 18-month window where they need to start getting the right pieces in place. You could do a PCOB readiness evaluation for them. We could start providing accounting services. If they already have consultants doing the accounting services, we can help them with the PCOB audits. Going IPO, where you’re going to need at least two years of PCOB audits, which are different than under AICPA standards, which most private companies do have in addition to if they’re looking to do capital raises, there’s a lot of assistance they might need with registration statements and putting their documents together to have the appropriate exposures.

Companies on the other end of the capital market maybe looking to have an exit strategy via private equity or another strategic buyer, in which case there are transaction advisory services we could provide to those. QOB services. We can help them with their books and records and putting together appropriate financial statements that are clear and are going to help the buyer make an educated decision and hopefully make processes lot smoother.

Brent Leslie:

There’s one other area that I think that we can really provide a lot of value, and if you look at the last several years, a lot of the companies that have gone through this process and are currently already in the capital markets have seen so much disruption with all of the consolidation going on in the accounting world where you’re starting to see all these new names pop up and all these new firms buying old firms and changes and a lot of involuntary changes in auditors and things like that through the process. And that’s created a lot of turbulence, a lot of fee pressure and fees are going up tremendously in a lot of these places and services going down. And there’s just a lot of companies that are looking for a better solution. And I think that we are that solution. I think that while we’re never going to be a low cost, the cheapest provider in the room, I think that we can add a lot of value for the service that we do.

And I think that it can come at a very fair price. And I think that with all that disruption that’s going on, we can be that steady wind in the background to help guide through all that and not have to deal with those problems. We’ve taken over a tremendous number of clients in the last couple of years that have kind of fallen into this where they were halfway through their audits and the firm that they were using got acquired by another firm, and next thing you know the fee went through the roof and the audits totally changed and there’s new issues they’d never heard about. And we’ve done a great job of coming in and helping them navigate those things, whether it be on the advisory side and getting through that or whether it be on the audit side and taking over as the auditors and trying to work with them to get through those hardships and get onto to a more steady footing.

So I think that, like I said, there’s the companies looking to access the capital markets like Mike was talking about, and then there’s the existing companies that are there. They’re just looking for a better solution at a fair price. And I think that we can be a great solution to either one of those kinds of companies. Mike, I know you recently did an article on some of the things that are going on with the NASDAQ and some of the changes there and some of the trends that we’re seeing. And everybody keeps hearing all these buzzwords about SPACs and reverse mergers and all of these things, and they sound like these evil… They get made out to be these evil horrible things. And sometimes they are, sometimes there’s not. There’s a lot of stuff to mold your way through to try to get to what the right answer is for you and your business.

And I think we have a lot of experience in all of those types of things where we’ve helped a lot of companies successfully complete SPAC transactions and get public that have been successful. And we’ve helped companies with reverse mergers and straight IPOs, and we’ve helped companies that initially thought maybe that they wanted to go the IPO route and then realized that maybe a private equity round is more appropriate at this time and helping them find the right partners and working with them to help them get through those solutions too.

And so I think, Mike, you mentioned a little bit earlier that there’s a myriad of different scenarios and things that happen. I think the initial impetus though is when companies get to the point where they decide, “Hey, we need to raise capital,” and just go to the bank and get another loan or line of credit isn’t going to cut it anymore. Whether it’s we need the strategic partnership of somebody or whether it is we just need to raise the capital to be able to do the expansion we want to do, I think our group is very well suited to be able to help navigate those kind of decisions and help guide towards what direction may be the best direction.

Michael Corkery:

I think it’s just preparation, right? I think if you’re starting to think, like Brent said, that you need additional capital, need to start exploring every option available to you, and that’s not necessarily something you’re going to know. It’s something we deal with on a day-to-day basis in our team, and we’d love to be the first call and help guide you through that process and at least show you the options and then you take three steps from there.

Brent Leslie:

Yeah, I think I always say that conversations are free, and so we’re more than happy to get on the phone with anyone and talk through how some of these things work and what the options are. And the other thing is from doing this for so many years between myself and Mike and the rest of our team, we know so many service providers that are out there and can help make connections to the right attorneys and the right bankers and the right investment bankers and things like that too that might be able to help you come to the right conclusions so that you can ultimately reach your goals as a business.

Michael Corkery:

And that’s the ultimate goal for everybody is we want to see our clients be successful, we want to help them and provide responsive, quick, diligent service so they can achieve their dreams.

Brent Leslie:

Well, I really appreciate everybody’s time in listening to this today. And if there’s anything that we can help you with or if you have any questions about the process of this, please feel free to reach out to us. I’m sure the contact information will be included here and we’re happy to have a conversation with you and see how we can help you.

Speaker 1:

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